Stonegate, the UK’s largest pub group, had filed an £845mln lawsuit against three insurance firms for losses incurred during the pandemic, setting up a high-profile and potentially bitter confrontation.
According to an FT report, the Slug & Lettuce owner has filed a claim in London’s High Court against MS Amlin, Liberty Mutual Insurance Europe and Zurich stating that a policy containing insurance payouts for business interruptions and related losses was triggered multiple times during the pandemic.
The chain also said that while the insurers have not disputed the claim, they have said their liability is only £17.5mln, of which they have already paid £14.5mln. However, Stonegate contends that between February 2020 and April 11 2021 losses related to business interruption were a whopping £481mln.
The group has also predicted that further losses under the policy’s indemnity period, which runs between April 2021 and 2023, could reach as high as £365mln. Stonegate said it is entitled to make these claims under policy clauses covering the presence of a notifiable disease near its outlets as well as loss of access to premises and enforced closures.
Stonegate’s lawsuit is one of the largest in a long-running set of disputes between the hospitality and insurance sector over how much the latter is required to pay out as a result of lockdown measures imposed during the pandemic.
Various Eateries, the owner of the Strada chain of restaurants, has filed a legal claim for £16.3mln against its insurer Allianz, while upmarket restaurant owner Corbin & King is also pursuing several insurers through the courts.
The spate of lawsuits follows a ruling by the UK’s Supreme Court in January that many business interruption policies should have provided cover for losses incurred as a result of the pandemic, however, the ruling covered on certain policy wordings, sparking a litany of claims by hospitality groups to argue coverage under the decision.
However, insurers have argued that some policies were not intended to cover the extended interruptions incurred by the pandemic, but rather shorter or more localised incidents.